A study of increasing the flexibility and lowering the internal stress of the cured epoxy resin was carried out by using polysiloxanes capped with functional groups and premaking polysiloxane particles with d = 1.1 mum and narrow distribution. Polysiloxanes capped with functional groups were prepared by the reaction of X-22-163B with bisphenol-A, hexanedioic acid, and decanedioic acid. Poly(dimethylsiloxane-b-arylester was synthesized by the reaction of poly (dimethylsiloxane) (X-22-162C) with arylester oligomers. Polysiloxane particles were obtained by cycling the mixture of polysiloxanes containing a vinyl group and a=Si-H group, respectively, emulsifier, and water in homogenizer. When oily polysiloxanes were used to improve the flexibility of epoxy resin, good compatibility of polysiloxanes with epoxy resin, and high molecular weight capped with epoxy group favor the formation of small-sized particles and homogeneous dispersion in the cured matrix. Comparisons were made among the epoxy resin modified with oily polysiloxanes capped with different functional groups. The results indicate that lightly crosslinked polysiloxane particles with d = 1.1 mum and narrow distribution have the greatest increase of elongation and biggest decrease of internal stress. The reason for this is discussed.